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Healthcare ETF (IYH) Hits New 52-Week High

For investors seeking momentum, iShares U.S. Healthcare ETF IYH is probably on radar now. The fund hit a 52-week high, and is up about 23.5% from its 52-week low price of $137.30/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

IYH in Focus    

This ETF offers broad exposure to the healthcare sector with key holdings in pharma, biotech, healthcare equipment and managed healthcare. Holding 118 stocks in its basket, Johnson & Johnson JNJ dominates the fund’s returns with double-digit exposure while other firms account for less than 6.4% share. The product has amassed nearly $1.9 billion in its asset base while charges 44 bps in annual fees (see: all the Healthcare ETFs here).

Why the Move?

Healthcare has been an area to watch lately given the strong momentum building in the space. This is especially true as the release of Senate Republicans' healthcare bill to replace Obamacare, investor’s defensive tilt to the portfolio amid low growth and uncertainty, and the surge in Clovis Oncology CLVS shares following its positive cancer drug data renewed optimism in the sector.

More Gains Ahead?

Currently, IYH has a Zacks ETF Rank of 1 or ‘Strong Buy’ rating with a Medium risk outlook, suggesting that the outperformance could continue in the months ahead. Further, many of the segments that make up this ETF have a strong Zacks Industry Rank, so there is definitely still some promise for those who want to ride on this surging ETF a little longer.

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